Won-Dollar Exchange Rate Closes at 1250.80 Won... First Time in 2 Years and 1 Month

by Seo Sojeong

Published 26 Apr.2022 16:40(KST)

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong, Sejong=Reporter Kim Hye-won] The won-dollar exchange rate has continued its upward trend for the fourth consecutive day, soaring to the 1250-won level.

On the 26th, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1250.80 won, up 0.90 won from the previous trading day's closing price. This is the highest level since March 23, 2020, when it was 1266.50 won based on the closing price.

During the session, it surged to 1251.2 won, breaking the intraday yearly high record of 1250.1 won set the previous day.

The dollar's strength continues as the yuan weakened due to concerns over economic slowdown caused by the spread of COVID-19 in China, coupled with ongoing caution that the U.S. Federal Reserve (Fed) will intensify its tightening measures.

Recently, despite the won-dollar exchange rate soaring, the foreign exchange authorities' official verbal intervention on the previous day?the first in over a month since March 7?has not been able to halt the upward trend.

With the psychological resistance level of 1250 breached, the market expects the upward trend to continue for the time being. Ahead of the Federal Open Market Committee (FOMC) meeting scheduled for the 3rd and 4th of next month (local time), concerns over the Fed's aggressive tightening have not eased.

The foreign exchange authorities have indicated the possibility of intervention while closely monitoring the recent rise in the exchange rate. A Ministry of Economy and Finance official said, "As the exchange rate reached the psychological resistance level of 1250, we thought it was appropriate to send a message once, which is why we conducted verbal intervention the previous day," adding, "We will continue to watch for market imbalances and may intervene if detected."